Instructions 1. Record the January 1 credit balance of $50,000 in a T account for Allowance for Doubtful Accounts.

2. Journalize the transactions. Post each entry that affects the following selected T accounts and determine the new balances: Allowance for Doubtful Accounts Bad Debt Expense

3. Determine the expected net realizable value of the accounts receivable as of December 31.

4. Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December 31 had been based on an estimated expense of ; of 1% of the sales of $15,800,000 for the year, determine the following: a. Bad debt expense for the year. b. Balance in the allowance account after the adjustment of December 31. c. Expected net realizable value of the accounts receivable as of December 31. PR 8-2B Aging of receivables; estimating allowance for doubtful accounts Obj. 4 - Describe the allowance method of accounting for uncollectible receivables. Wig Creations Company supplies wigs and hair care products to beauty salons throughout Texas and the Southwest. The accounts receivable clerk for Wig Creations prepared the following partially completed aging of receivables schedule as of the end of business on December 31, 20Y7: The following accounts were unintentionally omitted from the aging schedule. Assume all due dates are for the current year except for Visions Hair & Nail, which is due in the next year. Customer Due Date Balance Arcade Beauty Aug. 17 $10,000 Creative Images Oct. 30 8,500 Excel Hair Products July 3 7,500 First Class Hair Care Sept. 8 6,600 Golden Images Nov. 23 3,600 Oh That Hair Nov. 29 1,400 One Stop Hair Designs Dec. 7 4,000 Visions Hair & Nail Jan. 11 9,000 Wig Creations has a past history of uncollectible accounts by age category, as follows: Age Class Percent Uncollectible Not past due 1% 130 days past due 4 3160 days past due 16 6190 days past due 25 91120 days past due 40 Age Class Percent Uncollectible Over 120 days past due 80 Instructions 1. Determine the number of days past due for each of the preceding accounts. 2. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals. 3. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule. 4. Assume that the allowance for doubtful accounts for Wig Creations has a credit balance of $7,375 before adjustment on December 31. Journalize the adjustment for uncollectible accounts. 5. Assume that the adjusting entry in (4) was inadvertently omitted, how would the omission affect the balance sheet and income statement?